FINANCIAL ANALYSIS

Southwest Airlines

Southwest Airlines

Overview of South West Airlines

Southwest Airlines is a passenger airline that provides scheduled air transportation in the United States. Southwest provides point-to-point service. As of Dec 31 2011, Southwest served 72 cities in 37 states throughout the United States. Company's subsidiary, AirTran Airways, Inc., operates the passenger airline AirTran Airways (AirTran). In addition to providing scheduled air transportation in the United States, AirTran provides service to selected international locations. AirTran's route system provides hub-and-spoke service. As of Dec 31 2011, AirTran served 68 United States and near international destinations. Company and AirTran operated a total of 698 Boeing aircraft as of Dec 31 2011.

SouthWest Airlines

TD to Equity

=

3,751,000,000

=

0.55

TD to Total Debt plus equity

=

3,751,000,000

=

0.35

6,877,000,000

10,628,000,000

LTD to Equity

=

3,107,000,000

=

0.45

LTD to Total Debt plus equity

=

3,107,000,000

=

0.29

6,877,000,000

10,628,000,000

STD to Equity

=

644,000,000

=

0.09

STD to Total Debt plus equity

=

644,000,000

=

0.06

6,877,000,000

10,628,000,000

The above ratios of South West airlines show that the leverage situation of the company is satisfactory in terms of total debt to equity. From the above ratios, it can be observed that the company has high long term debt ratios against the equity; however, the short term debt situation of the company is satisfactory for the company. In this context, financial leverage is derived that from using debt to finance an investment (Bragg, 2007). This debt creates a financial cost (interest), but if the investment generates an income greater than the interest due, the surplus goes to increase the profit of the company (Helfert, 2001). Furthermore, it can be observed that the overall the performance of the company is adequate for investors the investors to invest in the company as the debt structure of the company shows the actual position of the company.

US Airways Group Inc.

TD to Equity

=

4,400,000,000

=

52.4

TD to Total Debt plus equity

=

4,400,000,000

=

0.98

84,000,000

4,484,000,000

LTD to Equity

=

4,003,000,000

=

47.7

LTD to Total Debt plus equity

=

4,003,000,000

=

0.89

84,000,000

4,484,000,000

STD to Equity

=

397,000,000

=

4.73

STD to Total Debt plus equity

=

397,000,000

=

0.09

84,000,000

4,484,000,000

Delta Air Lines Inc.

TD to Equity

=

15,252,000,000

=

17

TD ...